Associated Industries of Massachusetts (AIM) today commended Senator Scott Brown for supporting an amendment that would have left the development of national greenhouse gas regulations in the hands of Congress.

Senators defeated by a tie 50 to 50 vote a measure that would have prevented the U.S. Environmental Protection Agency from bypassing Congress and regulating greenhouse gases under the Clean Air Act.

Senate Republicans pushed the EPA regulatory prohibition after the failure of the last Congress to pass “cap and trade” raised fears that the Obama administration would pursue the same goal administratively, without Congress.

AIM supports a national approach to greenhouse gas regulation, but the association remains concerned about the aggressive encroachment of non-elected regulators upon policy issues that should be debated in Congress. Agencies such as the National Labor Relations Board and the United States Department of Labor, for example, have fundamentally restructured the regulatory playing field on rules governing union elections, independent contractors and other important issues.

“Massachusetts employers appreciate Senator Brown’s position that decisions on broad policy issues such as greenhouse gas regulation belong with elected representatives. Allowing regulatory agencies to make those decisions deprives voters of the ability to comment, participate and ultimately render judgment at election time,” said Robert Rio, Senior Vice President of Government Affairs at AIM.

National greenhouse gas regulations will have a limited effect on Massachusetts since the commonwealth already regulates emissions under the Global Warming Solutions Act of 2008. The law imposes onerous Massachusetts-only standards to reach the goal of reducing greenhouse gasses 20 percent by 2020 and 80 percent by 2050 over 1990 levels.

The House of Representatives passed a spending bill in February that would prohibit the EPA from regulating carbon dioxide emissions.

Employers in Massachusetts and elsewhere will not face onerous new 1099 tax reporting requirements now that the U.S. Senate has passed and sent to President Barack Obama a repeal of the controversial health-care reform provision.

Senators voted 87-12 today to repeal the controversial law that would have required businesses beginning in 2013 to file 1099 tax forms for every vendor that sold them more than $600 worth of goods and services. Both Massachusetts senators – Democrat John Kerry and Republican Scott Brown – supported the measure.

President Obama has expressed concern about the funding portions of the repeal but is expected to sign it.

The Senate vote apparently spares 38 million businesses, charities and non-profit organizations from a bureaucratic nightmare that some experts estimate would have increased paperwork by 2,000 percent. Associated Industries of Massachusetts has strongly supported repeal of the provision, which would have saddled employers with significant administrative and accounting expense at a time when many are already struggling with the soft economy.

“AIM and its member employers commend Senator Kerry, Senator Brown and their colleagues for taking a stand against a regulation that would have placed an intolerable burden on millions of small companies across the country. We urge President Obama to sign the repeal,” said Richard C. Lord, President and Chief Executive of the Association.

Today’s Senate vote approved an earlier version of the 1099 repeal approved by the House of Representatives on March 3.

The 1099 filing requirement was projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes. Now, the money will be made up by changing another part of the health care law, requiring more families to repay tax credits designed to help them cover insurance premiums, if their incomes increase beyond certain levels.

It’s one down and one to go for the U.S. Senate as it revisits several harmful business-tax provisions of last year’s federal health care reform.

The Senate acted last week to repeal the provision that expanded 1099 tax expenditure reporting requirements on business. Now comes word that Senator Scott Brown intends to file a bill to repeal a medical device sales tax also contained in the health reform statute. That’s good news for Massachusetts and its 225 medical device manufacturing companies.

The 2.3 percent excise tax on medical device manufacturing firms is scheduled to go into effect after December 31, 2012. The tax would require companies to absorb the additional cost or to pass it along to customers, a situation that would drive up the already high cost of health care.

The United States Senate voted 81 to 17 Wednesday to repeal a provision of the health reform law that would have required businesses to file 1099 tax forms for every vendor that sold them more than $600 worth of goods and services.

Massachusetts Senators John Kerry and Scott Brown both supported an amendment sponsored by Democratic Senator Debbie Stabenow of Michigan that would do away with the expanded 1099 reporting requirement and pay for the repeal with unspent appropriated funds, or already appropriated money from various federal agencies, as directed by the Office of Management and Budget.

The repeal amendment, tacked onto a reauthorization for the Federal Aviation Administration, won the support of all Senate Republicans and 34 Democrats.

The measure is expected to encourage the House of Representatives to move forward with similar legislation – dubbed HR4 - that has attracted 263 co-sponsors. The list of sponsors includes two members of the Massachusetts delegation, Representatives Barney Frank and Nikki Tsongas.

The 1099 mandate, due to take effect in 2013, would require more than 30 million U.S. companies that currently only have to tell the IRS the value of services they purchase from vendors to also report the value of goods and merchandise they purchase. Lawmakers added the 1099 reporting footnote to the federal health reform bill in an effort to fund a portion of the massive overhaul.

Associated Industries of Massachusetts believes the provision would saddle employers with significant administrative and accounting expense at a time when many are already struggling with the soft economy.

“Massachusetts employers commend Senators Kerry and Brown for supporting a common-sense amendment that will head off an estimated 2000 percent increase in 1099 paperwork for employers. We appreciate the sponsorship of Representatives Tsongas and Frank and urge the House to repeal the mandate as soon as possible,” said John Regan, Executive Vice President of Government Affairs at AIM.

Both U.S. Senators from Massachusetts and two members of the Bay State’s House delegation this week supported a compromise $801 billion tax package that will help employers by extending the federal research and development tax credit and a provision that would allow businesses to write off their investments in equipment.

Senators John Kerry and Scott Brown were joined by Representatives William Delahunt and Niki Tsongas in voting for the measure, which will extend for two years the Bush-era tax reductions and add 13 months of unemployment benefits. The remaining members of the Massachusetts Congressional delegation – Representatives Michael Capuano, Barney Frank, Stephen Lynch, Edward Markey, James McGovern, Richard Neal, John Olver and John Tierney – were opposed.

President Barack Obama, who developed the compromise package with Congressional Republicans, is expected to sign the bill as early as today.

Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts, noted that extension of the Bush tax cuts will provide additional capital to the many Massachusetts business owners who operate as subchapter-S corporations and pay the personal income tax rate.

“The president and Congress deserve tremendous credit for passing legislation that will stimulate job growth and advance the economic recovery here in Massachusetts,” Lord said.

The federal research and development tax credit is a complex incentive that can amount to 20 percent for companies that existed during the 1980s and ratchet down to 7 percent for companies founded later. The credit has been a sort of orphan among economic stimulus measures – it has never been made permanent, has lapsed four times and been renewed more than a dozen times.

Both the R&D credit and the expensing provisions benefit key sectors of the Massachusetts economy. Durable goods make up almost $24 billion of the $34 billion in gross domestic product generated by Massachusetts manufacturers, while a recent study by AIM and the University of Massachusetts underscored the importance of research and innovation in allowing Bay State defense contractors to triple the value of their business in the past 15 years.

2010 shifted the always unpredictable alchemy of business and politics in the Bay State.

A year that began with a political earthquake when Republican Scott Brown won the Senate seat formerly occupied by Edward M. Kennedy ended amid hopeful signs that the halting economic recovery was here to stay. Massachusetts employers spent 2010 trying to put the economic crisis behind them while dealing with developing crises surrounding the cost of health care and electricity.

What were the top 10 stories that affected Massachusetts employers during 2010?

Massachusetts economy recovers fitfully, but faster than the nation as a whole.

The unique mix of knowledge-based, high-value companies that drive the Massachusetts economy helped the commonwealth end 2010 with an unemployment rate of 8.1 percent, well under the national rate of 9.3 percent. The AIM Business Confidence Index rose throughout the spring, and then returned to positive territory late in the year after turning bearish in the third quarter.

AIM challenges expensive National Grid/Cape Wind power agreement.

Associated Industries of Massachusetts (AIM) asked the Massachusetts Supreme Judicial Court in December to set aside the commonwealth’s approval of a power-purchase agreement between National Grid and Cape Wind that will increase electric bills for thousands of Massachusetts employers. AIM said the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers.

The cost of providing health insurance to workers reached the tipping point for employers as rates rose up to 40 percent and virtually everyone agreed that the Massachusetts health care market is unsustainable without fundamental changes to the way companies and consumers purchase medical services. Governor Patrick rejected scores of proposed rate increases by insurance plans, then signed a cost-containment law requiring insurers to offer low-cost, limited or tiered network plans, and setting the stage for broad changes in the way insurance companies pay for medical care.

Political scramble - Scott Brown elected to the Senate and Governor Patrick re-elected despite national Republican landslide.

Republican Scott Brown of Wrentham shook the political world in January when he won a special election to fill the Senate seat held for decades by the Kennedy family. The election made Brown a superstar in Washington and unleashed a tidal wave that returned Republican control to the House of Representatives in the November elections. Ironically, one of the only states the tidal wave missed was Massachusetts, where Governor Patrick won re-election and every Democratic representative was returned to office.

Corporate acquisitions are back.

Two years after the global financial crisis, New England companies with strong balance sheets pulled out their wallets and began to make strategic acquisitions. Connecticut-based Northeast Utilities agreed in October to buy NStar for $4.17 billion in a deal that will create the largest New England utility company. German drug giant Merck KGaA bought life sciences company Millipore of Billerica for $6 billion in March. Massachusetts companies were also buyers: Thermo Fisher Scientific announced in December that it would purchase Dionex Corporation of California for $2.1 billion.

President Barack Obama in March signed landmark national health reform legislation that bore a striking resemblance to the Massachusetts health care reform law of 2006. The federal law requires individuals to carry health insurance, changes underwriting rules and imposes a fee if an employer does not offer coverage. The fact that Massachusetts was the only state in the nation with its own health reform initiative was a mixed blessing for employers – the concepts were familiar, but there are significant differences between the state and federal laws that must be reconciled. In December, a U.S. District Court judge in Virginia ruled that the individual mandate is unconstitutional.

Defense industry emerges as the untold success story of the Massachusetts economy.

A report by AIM and the University of Massachusetts in December showed that as the overall economy has struggled in the face of two recessions and fundamental industry shifts, Massachusetts defense contractors quietly tripled the value of their contracts to $15.6 billion. They doubled their employment rolls to 115,563 people and increased their overall economic output by 146.2 percent. The report also found that innovation-rich Massachusetts defense contractors are well positioned to offset overall defense cutbacks by addressing technology needs at the Departments of Defense and Homeland Security.

Furious lobbying by AIM and business interests around the country prevented passage in Congress of the so-called Employee Free Choice Act, which would have deprived workers of the right to a private ballot in union elections. Congress also declined to pass another labor priority, the Paycheck Fairness Act. But President Obama’s appointment of union lawyers Craig Becker and Mark Pearce to the National Labor Relations Board shifted the labor relations playing field steeply away from employers.

Massachusetts approves wide-ranging economic development measure.

The Legislature approved and the governor signed an economic development bill that limits the scope of combined tax reporting, creates a 3 percent capital gains tax rate for individual investors in start-up companies, and provides most industries with the ability to extend a net operating-loss (NOL) carryforward from five to 20 years. The bill also places an automatic sunset provision on state regulations and requires proposed new regulations to include a business impact statement. The state will undertake a study of the factors driving the high price of electricity for Massachusetts employers.

State lifts charter school cap, adopts national standards and wins Race to the Top dollars for education reform.

A controversial decision to endorse national education standards paid off for Massachusetts in August when the commonwealth won some $250 million in federal education money through the Race to the Top (RTTT) competitive grant program for school improvement. The money will support reform efforts in four areas: standards and assessments; statewide data systems; effective educators; and turning around low-performing schools. These priorities were supported by employers, who recognize the importance of educated citizens to fuel economic growth.

What is your opinion about the most important business developments of 2010? We welcome your comments.

Senator Scott Brown has a message for Massachusetts business leaders concerned about the willingness of Congress and the President to address economic issues:

“You need to scream louder because they still don’t hear you,” the Republican senator told 400 business leaders this morning at the AIM Executive Forum in Waltham.

Brown said that lawmakers in Washington D.C. who campaigned this fall on economic issues and job creation seem unwilling to address those issues now that the lame-duck session of Congress is underway. He called for lawmakers to get to work on measures that will accelerate the economic recovery - lowering corporate taxes, correcting the onerous Form 1099 provision of health reform and reducing regulatory red tape.

“Washington and Beacon Hill need to regain trust of the people they serve. They need to get back to basics on taxes, deficits, education and debt – the things the American people want to focus on,” he said.

Brown maintained that government “just can’t keep beating corporations over the head” and expect to create a business environment that will put millions of people back to work.

Brown’s comments came as he became the first member of Congress from Massachusetts to be honored with the Manufacturing Excellence Achievement Award from the National Association of Manufacturers for a 100 percent voting record in support of economic growth and opportunity. He also presented the first annual Next Generation Manufacturing Award to Tegra Medical of Franklin.

The junior senator addressed manufacturing throughout his speech, arguing that the lack of urgency surrounding economic policy in Washington stands in stark contrast to the pitched battle that manufacturers in Massachusetts and through the country must fight every day against competitors from Europe and Asia. Brown said that while Massachusetts maintains an enviable base of manufacturing and research in sectors such as high technology, biotechnology, defense, alternative energy and homeland security, uncertain costs and burdensome regulations place jobs in those sectors at risk of going overseas.

“We’re competing with our countries that want to take our mantle as top dog. If they can’t beat us militarily, they will beat us economically,” he said.

He told the audience that he favors an aggressive series of measures to send the message that the U.S. government supports economic growth:

Change major elements of the federal health reform, including the requirement to file 1099 forms for all vendors with whom a company does more than $600 worth of business, and the tax on medical-device manufacturers.

Brown this week twice joined with Democrats to file bills intended to alter the health care law. One bill would eliminate the 1099 provision, while the second would move up the date by which states such as Massachusetts with their own health reforms could opt out of the federal program.

The senator said he judges each bill according to whether it increases taxes, increases the deficit, benefits Massachusetts, helps the country and stimulates job growth. He said that the most common reason he opposes bills is that they contain no funding mechanism.

The U.S. Senate today put the brakes on the so-called Paycheck Fairness Act, which would have unleashed a mountain of litigation against employers working in good faith to provide opportunity to all employees.

A 58 to 41 vote in favor of taking up Paycheck Fairness fell two votes short of the votes needed to break Republican opposition to the measure. Massachusetts’ two Senators split their votes, with Republican Scott Brown opposing the bill and Democrat John Kerry supporting it.

The House of Representatives approved the measure last year.

The legislation would allow unlimited punitive and compensatory damages in cases of suspected pay discrimination. Employers of all sizes would be exposed to increased litigation and a spate of frivolous class-action suits even when they act with a reasonable belief that their pay policies are lawful.

Associated Industries of Massachusetts President and Chief Executive Officer Richard C. Lord commended Brown for voting against a bill that would benefit trial lawyers more than workers.

“We believe that existing laws protect workers from gender discrimination while allowing employers the freedom to adopt competitive business practices to retain and attract employees. Expanding punitive damages will not prevent actual instances of discrimination; instead it will encourage the filing of claims to the benefit of plaintiffs’ attorneys,” Lord said.

AIM opposes the Paycheck Fairness Act because:

It would remove the Equal Pay Act caps on punitive and compensatory damages and would apply punitive damages to all cases.

It would also eliminate a key justification for pay disparities by requiring that any difference in pay be substantiated as a “business necessity.” Additionally, these defenses would have to be based on “bona fide” factors and would prevent employers from paying employees in different localities different rates.

It would make it easier for plaintiffs’ attorneys to file class-action suits against employers by requiring participants to “opt-out” of equal pay class-action suits. Currently, claimants must “opt-in” to suits if they wish to be part of the class.

It would require that the government collect information on employee wages and other data. This would also enable confidential salary information to be publicly shared with employees’ coworkers, competitors and others. In addition, the bill would allow the Equal Employment Opportunity Commission (EEOC) to require employers to report sensitive wage information that may be publicly disclosed.

An editorial in today’s Boston Globe called the Paycheck Fairness Act “too broad a solution to a complex, nuanced problem.”

“But what if a company offers a higher salary for retail workers in a more dangerous location, and more men sign up? What if a male worker leverages a job offer into a higher salary? Should these be illegal acts?” the editorial asked.

Executives of the National Association of Manufacturers (NAM) may want to bring a map with them when they arrive in Massachusetts Friday to present the Manufacturing Legislative Excellence Award to Senator Scott Brown.

It’s been a long time since a member of Congress from Massachusetts has earned NAM’s top award for supporting policies that enhance the competitiveness of American manufacturers. In fact, the presentation to Senator Brown at the conclusion of his speech to the AIM Executive Forum Friday will mark the first time ever that NAM has given the award to a Bay State lawmaker.

“We’re delighted to be coming to Massachusetts to recognize Senator Brown for his 100 percent voting record in support of economic growth and opportunity,” says Tiffany N. Adams, Vice President of Public Affairs for the 11,000-member NAM, which instituted the award in 1998.

The NAM will recognize Senator Brown for his pro-business votes on nine issues that came up after he won a special election to the Senate in January to fill the seat formerly held by Edward M. Kennedy. The votes included support for repeal of the onerous 1099 reporting rules in health care reform, continued access by manufacturers to reasonably priced over-the-counter derivatives and ensuring Congressional oversight of attempts to regulate greenhouse gas.

NAM will present Manufacturing Legislative Excellence Awards to 221 senators and representatives for their votes in the 111th Congress. Members of the House and Senate who vote in support of manufacturing at least 70 percent of the time earn the NAM award.

Senator Brown’s voting record in Washington is consistent with the one he assembled as a Massachusetts state senator prior to his January election. He and several other Republicans posted a top pro-business ranking of 67 percent on the 2007-2008 AIM Legislative Scorecard.

AIM President and Chief Executive Officer Richard C. Lord said that AIM and NAM work together closely on many important issues, so it makes sense for Senator Brown to receive the award at the AIM Executive Forum.

“We’re gratified that a Massachusetts senator has finally won national recognition for supporting jobs and economic growth. Let’s hope this is the first of many such NAM awards to be given in Massachusetts,” Lord said.

The $15 billion jobs bill due to be approved by the U.S. Senate today would create the first of several federal and state tax incentives that have been proposed for Massachusetts employers who hire jobless people. You can't tell the players without a program, so here's an update:

Federal Jobs Bill.Status: U.S. Senate is expected to pass today. Bill then goes to U.S. House of Representatives.Companies that hire unemployed people would receive an exemption from paying Social Security taxes on those workers for the remainder of 2010. Employers would also receive a $1,000 tax credit for each new worker who remains on the job at least one year.

State Job Creation Tax Credit.Status: Proposed by Governor Deval Patrick. Currently pending in the Massachusetts Legislature's Joint Committee on Revenue.Creates a $2,500 refundable tax credit on withholding tax for employers with 50 or fewer total employees who hire new full-time Massachusetts employees during the 12-month period beginning April 1, 2010. Calculation of the net increase in the number of Massachusetts employees is based on the employer's number of Massachusetts employees as of March 31, 2010. The credit is available to qualifying employers for each new full-time Massachusetts job created and sustained for at least one year.

The federal jobs bill passed a key preliminary vote yesterday with the support of Massachusetts Senator Scott Brown and four other Republicans. Senator Brown issued a statement about the vote:

"I came to Washington to be an independent voice, to put politics aside, and to do everything in my power to help create jobs for Massachusetts families. This Senate jobs bill is not perfect. I wish the tax cuts were deeper and broader, but I am voting for it because it contains measures that will help put people back to work.

"I was disappointed with the continuation of politics-as-usual in the drafting of this bill, as it was crafted behind closed doors, without transparency and accountability. I hope for improvements in that process going forward. All of us, Republicans and Democrats, have to work together to get our economy back on track. I hope my vote today is a strong step toward restoring bipartisanship in Washington."

Will these proposed tax incentives prompt your company to hire additional workers? We appreciate your comments.